Wellesley resident works to get carbon tax on 2016 ballot

Thursday

Jul 25, 2013 at 12:01 AMJul 25, 2013 at 11:13 PM

With carbon tax legislation stalled indefinitely in Congress, states are taking matters into their own hands. In the Commonwealth, this effort has been led in part by Wellesley resident Jessica Langerman, a co-founder of the Committee for a Green Economy (CGE), an organization dedicated to putting the question of a carbon tax on the 2016 ballot.

Samuel W. Learner /Townsman correspondent

With carbon tax legislation stalled indefinitely in Congress, states are taking matters into their own hands. In the Commonwealth, this effort has been led in part by Wellesley resident Jessica Langerman, a co-founder of the Committee for a Green Economy (CGE), an organization dedicated to putting the question of a carbon tax on the 2016 ballot.

Before co-founding the CGE, Langerman worked as an English teacher in Mansfield. But as a lifelong environmentalist, Langerman became increasingly frustrated with the reactive approach of environmental activists and the slow pace of legislative politics. Putting this frustration to good use, Langerman read up on environmental and economic issues and eventually teamed with Gary Rucinski, Cathy Carruthers and Sarah Lehnert last April to create the Committee for a Green Economy.

For Langerman, the essential question the CGE must answer is how to transition a carbon-dependent society to new sources of energy without hurting the economy. The solution, she believes, is a carbon tax that "recycles" revenue back into the state economy and people’s pockets.

Last Wednesday, July 17, the CGE advanced its cause at the State House with the presentation of a report examining the impact of a statewide carbon tax on the Massachusetts economy. The report, which the CGE commissioned, was prepared by the Regional Economic Models Incorporated (REMI), an Amherst-based company that uses economic modeling to inform government policy and corporate decision-making.

After a few brief introductions, REMI senior economic associate Scott Nystrom discussed the findings in a crowded State House hearing room. According to the report, the first $100 million in carbon tax revenue would go directly to the state, where it would be split evenly between improving infrastructure and funding research. The remaining revenue after the first $100 million would also be split 50-50. One half of that would go to businesses in the form of a 50 percent reduction in the corporate income tax. The remaining half would be further divided into two, with 25 percent set aside to lower the state sales tax and the other 25 percent to lower the personal income tax. In exchange for these tax reductions, carbon could be taxed at $15, $30, or $45 per metric ton, depending on what voters wanted.

The CGE proposal for Massachusetts combats two major criticisms of carbon taxes: that they are regressive and bad for the economy. Carbon taxes are often seen as regressive because they increase the cost of home heating fuels, electricity, and gasoline—expenses that take a disproportionately greater toll on the poor. But because the CGE tax proposal allocates revenue to provide for a 25 percent personal income tax reduction and, more importantly, a 25 percent sales tax reduction, the REMI study estimates that the tax would only increase the cost of living by about .2-.3 percent between now and 2035. Moreover, as the United States continues to tap new oil and shale gas reserves, an increased supply of cheap, American energy might further counteract the marginal increase in fuel prices from a carbon tax.

The second major criticism is that carbon taxes are bad for the economy, especially one still recovering from a global recession. And yet, according to the REMI study, most sectors in Massachusetts would actually benefit from the tax. "There will be some loss of jobs in utilities, chemical manufacturing, and other energy-intensive sectors," Langerman conceded. But in sectors like finance, technology, and healthcare—sectors in which Massachusetts excels—the corporate tax slash would far outweigh the cost of the carbon tax. With Bay State companies sitting on extra cash, Nystrom estimates that employment in Massachusetts between now and 2035 would increase by about 6,000 jobs over a no-carbon tax baseline.

But more than just benefiting certain sectors, the REMI study also suggests that a carbon tax would improve the economy as a whole. According to the report, in the $30 per metric ton scenario, the tax would add $250 million to State GDP each year by increasing consumer spending via tax cuts and by decreasing the amount of State money spent to import oil, gas, and petroleum products. Between now and 2035, that savings translates to nearly $6 billion in additional revenue for the State.

And perhaps most importantly, the carbon tax would significantly lower the state’s emissions. Over the next 20 years, a $30 per ton tax would reduce carbon emissions by a little more than 80 million metric tons.

Still, despite these benefits, some industries like manufacturing and utilities would suffer from the tax. When asked about the proposal, National Grid spokeswoman Deborah Drew told the Townsman that while the utility company supports efforts to address climate change and to invest in renewable energy, it believes that "incorporating a carbon tax in a single state alone is too limited and could have negative consequences for our customers—specifically our natural gas customers—if we are playing by one set of rules and other states are playing by another." Drew added that efforts to reduce emissions have often been the product of "working in tandem with other New England states" and not alone.

Commenting on National Grid’s hesitancy, Sen. Michael Barrett, who last year co-authored a preliminary carbon tax bill for Massachusetts with Middlesex’s 13th District Rep. Tom Conroy, said he welcomed the company’s suggestion that a carbon tax be regional. He then added that some pushback from utilities companies like National Grid was inevitable, but that "we have to start somewhere."

The only question now is whether the Barrett-Conroy legislation, which has yet to be signed into law, or the CGE ballot initiative will pass first. Regarding his own legislation, Barrett cautioned that "the most exciting ideas in legislative experience typically take six to 10 years to become law," noting that lawmakers "never submit a bill with the expectation that it’s going to become a statue the first session that legislators see it." But Barrett added that grassroots activists could expedite the legislative process. "One reason I decided to go with a carbon tax is because I am responding to constituent interest in doing something about climate change," said Barrett. "There is intense interest in this issue."

And indeed, in the run-up to 2016, Langerman and the CGE will be working hard at the grassroots level to forge coalitions with other environmentally conscious groups like 350 Massachusetts, Environment Mass. and the League of Women Voters. In addition, at the recommendation of Barrett, the CGE will also try to put "public policy" or "advisory questions" on as many 2014 district ballots as they can. These non-binding questions—which require petitions of over 1,000 signatures to actually get on the ballot—are designed to gauge the political climate of a district and to help the CGE better tailor the actual ballot initiative question come 2016.

But while Langerman’s group is gaining momentum in anticipation of 2016, not all carbon tax advocates are sure that a ballot measure is wise. In fact, Rep. Conroy thinks that a ballot initiative is "premature." "We need to educate people about the tax, share the idea, and amend the bill first," he said. To Conroy, it is paramount for voters to understand that a carbon tax—despite its name—would not actually amount to an increase in the individual tax burden, but rather "a shift of the tax burden." And to that end, while he still disagrees with the CGE’s decision to pursue a ballot initiative, Conroy was nonetheless glad to see the CGE commission the REMI study. "It will help to educate people and dispel assumptions about the impact of a tax on the economy, jobs, and everyday life," he said, noting that the REMI study shows how "the tax can be good for the economy, jobs, and emissions," while also making the state’s tax system fairer and more progressive.